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Reports: Fiscal cliff vote unlikely tonight

Mon, 31 Dec 2012 21:30:00 +0000

Updated: December 31, 5:04 p.m.: Numerous sources reported that there would not be a fiscal cliff vote tonight

Following weeks of hysteria, numerous news outlets are reporting that the House of Representatives may nDATEot even vote on a fiscal cliff deal before the tax hikes and spending cuts take effect at midnight tonight.

Here's CNN's take:

The reason is partly about process, but the benefit is political.

House GOP sources said the main reason the House is not likely to vote before the deadline is because the deal is not yet done, and it still has to go through the Senate–which takes time.

GOP leaders prefer to vote in broad daylight, sources said, instead of in the middle of the night.

"There is no difference in voting at 2 a.m. than tomorrow at 4 p.m.," one of the GOP sources said.

GOP sources admitted there is an added benefit to the Senate's delay: taxes would already be up, so lawmakers could argue that they are voting for tax cuts, as opposed to tax increases.

10 states set for minimum wage hike

Mon, 31 Dec 2012 20:56:00 +0000

Minimum wage workers in 10 states will get raise in 2013, CNN reports.

Employees in Rhode Island will see the biggest gains as the state voted to raise the minimum 35 cents per hour to $7.75. This translates into a bump of about $510 per year for the average worker. Nine other state minimums are climbing automatically as the result of laws that peg the minimum wage to increases in the cost of living.

CNN:

An estimated 855,000 workers will be directly affected by the wage changes, while another 140,000 are projected to be indirectly affected by the changes as employers readjust their pay scales to accommodate the new minimum, according to analysis by the Economic Policy Institute.

The new hourly rates will range between $7.35 in Missouri and $9.19 in Washington state, which has the highest minimum wage in the nation.

Workers may not notice much of a change in their paychecks, though, if lawmakers do not extend the payroll tax cut first enacted in 2010. Without the tax cut in place, workers would pay 6.2% instead of 4.2% -- an amount that could wipe out most of the wage boost.

What if we go over the fiscal cliff?

Mon, 31 Dec 2012 08:45:00 +0000

WASHINGTON (AP) — Efforts to save the nation from going over a year-end "fiscal cliff" were still in disarray as lawmakers returned to the Capitol to confront the tax-and-spend crisis. A tone-setting quotation was Democratic Sen. Harry Reid's assertion that the House under Republican Speaker John Boehner had been "operating with a dictatorship."

President Barack Obama flew back to Washington from Hawaii after telephoning congressional leaders from his Christmas vacation perch. Once back, he set up a meeting with leaders of both parties at the White House late Friday to make a fresh attempt to find a solution before Monday night's deadline.

A look at why it's so hard for Republicans and Democrats to compromise on urgent matters of taxes and spending, and what happens if they fail to meet their deadline:

___

NEW YEAR'S HEADACHE

Partly by fate, partly by design, some scary fiscal forces come together at the start of 2013 unless Congress and Obama act to stop them. They include:

— Some $536 billion in tax increases, touching nearly all Americans, because various federal tax cuts and breaks expire at year's end.

If cut, fiscal deal will pale against expectations

Sun, 30 Dec 2012 14:44:00 +0000

WASHINGTON (AP) -- Whether negotiated in a rush before the new year or left for early January, the fiscal deal President Barack Obama and Congress cobble together will be far smaller than what they initially envisioned as an alternative to purposefully distasteful tax increases and spending cuts.

Instead, their deal, if a deal they indeed cut, will put off some big decisions about tax and entitlement changes and leave other deadlines in place that will likely lead to similar moments of brinkmanship, some in just a matter of weeks.

Republican and Democratic negotiators in the Senate were hoping for a deal as early as Sunday on what threshold to set for increased tax rates, whether to keep current inheritance tax rates and exemptions and how to pay for jobless benefits and avoid cuts in Medicare payments to doctors.

An agreement would halt automatic across-the-board tax increases for virtually every American and perhaps temporarily put off some steep spending cuts in defense and domestic programs.

Gone, however, is the talk of a grand deal that would tackle broad spending and revenue demands and set the nation on a course to lower deficits. Obama and Republican House Speaker John Boehner were once a couple hundred billion dollars apart of a deal that would have reduced the deficit by more than $2 trillion over ten years.

Bad deal: The White House’s last-ditch plan stinks

Fri, 28 Dec 2012 22:57:00 +0000

This afternoon, President Obama is meeting with congressional leaders in a last-ditch attempt to avoid going over the so-called fiscal cliff. Most people in Washington think the effort is futile. That’s probably good thing, as going over the cliff is better than enacting the deal the White House is reportedly putting on the table at the summit.

While the details are sketchy and reports conflicting, according to the New York Times, the proposal would extend the Bush tax cuts up to $400,000 (instead of the $250,000 most Democrats want), and it would extend some important tax credits, but it would leave the estate tax as is, do nothing about the sequester (the automatic spending cuts that will go into effect January 1) and do nothing about the debt ceiling.

Grover Norquist breaks his own pledge

Wed, 19 Dec 2012 22:50:00 +0000

Grover Norquist’s tax pledge is pretty straightforward. “I [undersigned] pledge to ... oppose any and all efforts to increase the marginal income tax rates,” it reads. So, it was a little surprising to see this afternoon that Norquist has come out in favor of an increase in marginal income tax rates. An official declaration from his Americans for Tax Reform ruled as kosher John Boehner’s so-called Plan B fiscal cliff proposal:

The House this week will vote on a tax bill. This legislation—popularly known as “Plan B”--permanently prevents a tax increase on families making less than $1 million per year. ... Having finally seen actual legislation in writing, ATR is now able to make its determination about a legislative proposal related to the fiscal cliff. ATR will not consider a vote for this measure a violation of the Taxpayer Protection Pledge.

You know what else Plan B would do? Hike taxes on Americans making more than $1 million a year, in direct contravention of Norquist's pledge.

Dumb tweet of the day: “Here comes tax MAN”

Tue, 18 Dec 2012 22:28:00 +0000

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Poll: GOP would accept tax hike

Thu, 13 Dec 2012 17:06:00 +0000

A new poll from NBC News/WSJ finds that Americans are willing to accept higher tax rates and entitlement cuts, as long as it means Congress will strike a deal to avoid the "fiscal cliff."

Sixty-seven percent of those surveyed said they'd accept "cuts to an important federal government program you care about or an increase in federal taxes" in order for an agreement to be reached.

A larger number, 76 percent, said they would accept higher taxes as part of the deal. That includes 61 percent of Republicans who said they would accept tax increases to avoid the "fiscal cliff" cuts.

The CEO who says tax cuts don’t create jobs

Wed, 12 Dec 2012 21:45:00 +0000

If you listen to Republicans, you get the impression that raising taxes on the wealthiest Americans or on capital gains will kill tens of thousands of jobs and tank the economy. "200,000 jobs are going to be destroyed ... this kills the middle-class jobs that are created by those small businesses," Florida Republican Sen. Marco Rubio told Fox News yesterday about President Obama's proposed tax hikes.

But at least one of those job creators says that's bunk. Bill Harris, the former CEO of PayPal and Intuit (the giant software company whose main clients are small business), and the current CEO of Personal Capital, recently wrote a column in Forbes headlined "Tax Cuts Don't Create Jobs." We spoke with him to find out more and he told us marginal tax rates simply aren't the driving concern for companies when they're thinking about creating jobs.

Why do you say tax cuts don’t create jobs?

There is no “dangerous” Apple tax

Tue, 11 Dec 2012 18:38:00 +0000

There are so many good reasons to criticize Apple, the world really doesn't need to invent new ones that are utterly disconnected from reality. But that didn't stop Reuters' Chris Taylor, who has a column up today decrying "The 'Apple Tax' -- America's Dangerous Obsession."

Here's how it begins:

With the "fiscal cliff" looming, taxpayers are wringing their hands about all sorts of things. Income taxes might rise, dividends might get walloped, lifetime gift-tax exemptions might get slashed.

But when it comes to immediate impact on their wallets, maybe they should be thinking about something else entirely: The Apple tax.

Americans are shelling out big bucks annually to outfit the entire household with Apple products.

But about halfway down the column, Taylor notes, "Remember, this is not something that consumers are being forced to pay. They are dipping willingly into their own pockets, because they're essentially slaves to the devices."

Rich people: Raise my death taxes!

Tue, 11 Dec 2012 17:25:00 +0000

While other critical tax issues have been largely overshadowed by the looming expiration of the Bush income tax cuts for the wealthiest 2 percent of Americans, Congress is also debating what to do about another massive giveaway to the rich implemented under George W. Bush -- a dramatic cut, followed by the complete elimination of the estate tax, which conservatives derisively refer to as the “death tax.”

In 2001, Bush signed a law that gradually lowered the estate tax rate until 2010, at which point it was completely repealed. Congress extended the tax temporarily at the end of year (leaving people who died that year off the hook) and set the rate like this: The first $5 million of wealth go completely untaxed, while wealth above that line is taxed at just 35 percent. That temporary patch will expire at the end of the year, and if Congress does not act, rates revert to the much higher Clinton levels: An exemption on just the first $1 million and a 55 percent tax on all income above that.

Are Republicans just bad at politics?

Mon, 10 Dec 2012 17:30:00 +0000

All the hand-wringing and soul searching going on in the conservative movement boils down to one fundamental question: Are we bad at selling our policies, or are the policies themselves the problem? This distinction is critical and leads to radically different prescriptions. If the issue is merely in the marketing, then the damage the party sustained a month ago is mostly cosmetic and can be quickly repaired with better messaging and candidates. The alternative, however, calls for rethinking foundational principles -- and is much more painful.

John Podhoretz and Matt Lewis made the cases for the "just politics" camp in the context of the "fiscal cliff" debate. Democrats, they argue, have deftly outmaneuvered Republicans into spending all their time defending unpopular things that are peripheral to core conservative values. Podhoretz writes in the New York Post that even though Republicans have the superior policy on the Bush tax cuts and the need to cut entitlements, they have the inferior “messaging” and have ended up the “the eat-your-vegetables-and-shut-up party” -- noble and responsible, but doomed.

What Newt still won’t admit

Mon, 10 Dec 2012 12:33:00 +0000

In 1993, Democrats controlled both the legislative and executive branches, and they used their power that year to raise taxes on the top 1.2 percent of income-earners, creating a new top marginal rate of 39.6 percent. When that budget cleared the House (on a 218-216 vote in which every Republican voted no), the GOP whip issued a bold and frightening prediction:

“I believe this will lead to a recession next year,” Newt Gingrich said. “This is the Democrat machine’s recession. And each one of them will be held personally accountable.”

He still hasn’t come to terms with how wrong he was, and neither has his party. Nearly 20 years after Gingrich uttered those words, the debate in Washington carries echoes of that ’93 fight, with Barack Obama and congressional Democrats demanding a return to the Clinton rates for the top two percent of income-earners and with Republicans, who have not provided a single vote for a tax increase in all of the intervening years, doing their best to resist.

The most important fiscal cliff issue no one is talking about: Payroll taxes

Fri, 07 Dec 2012 19:10:00 +0000

You’d be forgiven for thinking that the fiscal cliff is all about what happens to the tax rate for the richest 2 percent of Americans, given the focus on the Bush cuts, but there’s another tax cut set to expire at the end of the year that will hurt far more people and very few people seem to care. And Democrats are committing political malpractice by not taking up the issue and bludgeoning Republicans with it every day.

The payroll tax holiday gives every single American who collects a paycheck a tax cut, $1,500 a year on average, and is one of the best ways to stimulate the economy. But it looks like Congress will let it expire on Dec. 31, even if they reach a deal on the Bush tax cuts.

First, some background. The holiday, which was created in late 2010 after a similar tax credit in President Obama’s stimulus package expired, cuts by 2 percent workers’ payroll tax bill, the tax that funds Social Security. The standard rate is 6.2 percent, but the temporary holiday dropped that to 4.2 percent, which works out to somewhere between a $400 cut for someone making $20,000 a year up to a $2,000 cut for someone making over $100,000.

Numbers not on GOP’s side

Thu, 06 Dec 2012 17:35:00 +0000

With no compromise in sight on fiscal cliff negotiations, the White House said in no uncertain terms yesterday that they are prepared and willing to go over the metaphorical cliff if Republicans refuse to allow the Bush tax cuts on the wealthiest Americans to expire. Politically, that's a more appealing option for Democrats than Republicans, who have been boxed in. On one side, they have an emboldened president's insistence that tax rates must go up, but on the other side they have their vows to the base, via Grover Norquist's pledge, not to raise rates. Something's got to to give.

Without a doubt, Republicans have been dealt the weaker hand here, as a look at poll numbers from the past few weeks demonstrates. "[We're in] a terrible position because by default the Democrats get what they want," Oklahoma Republican Rep. James Langford told NPR. And if there were ever a time in John Boehner's tenure as House speaker to concede big, now is it. Rank-and-file members seem to have recognized the bind they're in and are ready to back Boehner, even if he cuts a deal they're not thrilled with. Here's the story, in numbers:

Obama’s humblebrag: How to tell everyone you’re rich

Thu, 06 Dec 2012 17:04:00 +0000

Mitt Romney was never able to find the right way to talk about his money, but Barack Obama is happy to tell you that he's rich, again and again. That is, if he's asking for higher marginal taxes on the rich, whose ranks Obama first joined with book-related earnings and then with his $400,000 White House salary.

Obama said it again this week: "What the country needs … is an acknowledgment that folks like me can afford to pay a little bit higher rate," he told Bloomberg News. He's been saying it at least since April 2011, when he was pushing the "Buffett rule": "I don't need another tax cut," he said. "Warren Buffett doesn't need another tax cut."

House GOP is coming around to John Boehner

Thu, 06 Dec 2012 14:00:00 +0000

Though there are still some tensions between House Speaker John Boehner and the most conservative members of his caucus, Republicans have been lining up in support of the House Speaker - and pushing for potential concessions on tax increases if it will secure a budget deal.

The New York Times reports this morning that given Republicans' election night losses and the polls that show that Americans would blame the GOP if the country goes over the "fiscal cliff," House Republicans are looking at Boehner "with the same sort of respect that adult children award their parents for the sage counsel they ignored in their younger days."

From the Times:

On Wednesday, in a private meeting between Mr. Boehner and House Republicans, member after member spoke in support of him, in some cases saying a deal they would have rejected six months ago would most likely be taken today.

“I want to be a strong advocate and say that I am with the speaker,” said Representative Scott Rigell of Virginia, a House freshman. “I am with the leadership.”

Understanding the “fiscal cliff” in 150 seconds

Mon, 03 Dec 2012 19:21:00 +0000

UNDERSTANDING THE FISCAL CLIFF (IN 2 MINUTES 30 SECONDS)

Democrats, here are eight principles to guide you in the coming showdown over the fiscal cliff:

ONE: HOLD YOUR GROUND. The wealthy have to pay their fair share of taxes. That’s what the election was all about, and we won. It’s only fair they pay more. They’re taking home record share of national income and wealth, and have lowest effective tax rate in living memory.

TWO: NO DEAL IS BETTER THAN A BAD DEAL. You’re in a strong bargaining position. If you do nothing, the Bush tax cuts automatically expire in January, and we go back to rates during the Clinton administration. Which isn’t such a bad thing. As I recall we had a pretty good economy during the Clinton years.

THREE: MAKE REPUBLICANS VOTE ON EXTENDING THE TAX CUTS JUST FOR THE MIDDLE CLASS. After all the Bush tax cuts expire, have Republicans vote on extending the Bush tax cut just for the middle class. If they refuse and try to hold those tax cuts hostage to tax cuts for the wealthy, it will show whose side they’re on. They’ll pay the price in 2014.

FOUR: DEMAND HIGHER TAX RATES ON WEALTHY, NOT JUST LIMITS ON DEDUCTIONS. Don’t fall for Republican offers to limit some tax deductions on the wealthy. Demand we go back to higher tax rates on the wealthy and eliminate their unfair tax loopholes, so they truly start paying their fair share.

FIVE: DON’T CUT SAFETY NETS. Don’t sacrifice Medicare or Social Security, or programs for the poor. Americans depend on these safety nets and can’t afford any benefit cuts.

SIX: DON’T CUT INVESTMENTS IN OUR FUTURE PRODUCTIVITY. Education, basic R&D, and infrastructure aren’t spending; they’re investments in our future prosperity. If the return on these investments is greater than the cost, they ought to be made, period.

SEVEN: CUT SPENDING ON MILITARY AND CORPORATE WELFARE. You want to cut, cut spending on the military — which now exceeds the military spending of the next 13 largest military spenders in the world combined. And cut corporate welfare — support to agribusiness, oil and gas, Big Pharma, big insurance and Wall Street.

EIGHT: PUT JOBS BEFORE DEFICIT REDUCTION. Finally, don’t cut the budget deficit as long as unemployment remains high. Otherwise you’ll cause the economy to contract, making the deficit even larger in proportion. That’s the austerity trap Europe has fallen into. We need to create American prosperity, not European austerity.

Remember: Jobs come first.

Republicans’ tax insanity

Mon, 03 Dec 2012 13:00:00 +0000

On Sunday’s “Meet the Press,” Claire McCaskill pointed out that she’d met Grover Norquist for the first time backstage, then asked a pretty good question: “Who is he?”

Her point is that Norquist’s visibility and reputation dramatically exceeds his actual political clout. It’s understandable how this has happened. Republicans have evolved over the past three decades into a staunchly anti-tax party, and Norquist is a colorful and endlessly quotable symbol of this absolutism – one who happens to live and work in close proximity to much of the national political press corps. So he gets an awful lot of face time on television and it can sometimes seem as if he and his anti-tax pledge are the reason no Republican member of Congress has voted for a tax hike in over two decades.

But, as Tim Noah wrote last week, Norquist’s actual power in Washington and within the GOP is illusory. In terms of stature and public prominence, he’s been a major beneficiary of the party’s opposition to tax increases – but he hasn’t been the driving force behind it. The real story of the GOP’s modern evolution on taxes played out in several stages, from the late 1970s to the early 1990s.

Geithner invites GOP counteroffer in fiscal cliff talks

Sun, 02 Dec 2012 14:55:00 +0000

WASHINGTON (AP) — President Barack Obama is ready to entertain Republican proposals for spending cuts, but GOP lawmakers must first commit to higher tax rates on the rich and specify what additional spending cuts they want in a deal to avoid the looming "fiscal cliff," Treasury Secretary Timothy Geithner said.

"The ball really is with them now," Geithner, one of the president's chief negotiators with Capitol Hill, said during appearances on five Sunday talk shows. He acknowledged that Republicans are "having a tough time trying to figure out what they can do, what they can get support from their members for." The White House "might need to give them a little more time to figure out where they go next."

Geithner presented congressional leaders Thursday with Obama's postelection blueprint for averting the combination of hundreds of billions in tax increases and spending cuts that will take effect beginning in January if Washington doesn't act to stop it.

But House Speaker John Boehner, R-Ohio, dismissed the plan as "not serious," merely a Democratic wish list that couldn't pass his chamber.